02365cam a22002657 4500001000600000003000500006005001700011008004100028100002300069245011800092260006600210490004100276500001500317520120800332530006101540538007201601538003601673690008801709690009101797700002001888710004201908830007601950856003702026856003602063w8323NBER20150802215838.0150802s2001 mau||||fs|||| 000 0 eng d1 aRousseau, Peter L.10aFinancial Systems, Economic Growth, and Globalizationh[electronic resource] /cPeter L. Rousseau, Richard Sylla. aCambridge, Mass.bNational Bureau of Economic Researchc2001.1 aNBER working paper seriesvno. w8323 aJune 2001.3 aThis paper brings together two strands of the economic literature -- that on the finance-growth nexus and that on capital market integration -- and explores key issues surrounding each strand through both institutional/country histories and formal quantitative analysis. We begin with studies of the Dutch Republic, England, the U.S., France, Germany and Japan that span three centuries, detailing how in each case the emergence of a financial system jump-started economic growth. Using a cross-country panel of seventeen countries covering the 1850-1997 period, we then uncover a robust correlation between financial factors and economic growth that is consistent with a leading role for finance, and show that these effects were strongest over the 80 years preceding the Great Depression. Next, we show that countries with more sophisticated financial systems engage in more trade and appear to be better integrated with other economies by identifying roles for both finance and trade in the convergence of interest rates that occurred among the Atlantic economies prior to 1914. Our results suggest that the growth and increasing globalization of these economies might indeed have been 'finance-led.' aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aE44 - Financial Markets and the Macroeconomy2Journal of Economic Literature class. 7aF36 - Financial Aspects of Economic Integration2Journal of Economic Literature class.1 aSylla, Richard.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w8323.4 uhttp://www.nber.org/papers/w832341uhttp://dx.doi.org/10.3386/w8323